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Foreclosure Auction – Is it Worth it?

By
Real Estate Agent with Realnet Tampa Bay
Foreclosure auction Foreclosure auction

When lenders foreclose on a property, they want to get cash quick; the fastest way to do that is to sell the property in a foreclosure auction. A foreclosure auction is a great opportunity for investors to obtain properties at well below market value.
The unfortunate part of buying a foreclosed property at an auction is that they may have other liens besides the mortgage. As with any investment property, you need to evaluate the property to make sure it’s a good deal. Do your research; look into the property to make sure that there isn’t a second mortgage, or overdue taxes. The winner of the foreclosure auction will be expected to take care of any other liens on the property.
If you go to a foreclosure auction, the auctioneer will provide you with a legal description of the property prior to bidding. In order to actively bid at an auction, you usually have to obtain prequalification for financing, but some states allow a certain amount for a deposit, with the remaining balance due within 24 hours. Each state has their own rules, so it’s important to find out your state’s requirements prior to attending a foreclosure auction.
If the foreclosed property does not sell at the auction, it gets added to the bank’s collection of bank owned properties, also known as REO properties.
You can avoid the hassle of a foreclosure auction by viewing Realnet’s foreclosure listings. We have the best investment property in Florida!

Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Buy at foreclosure is perfect example of Caveat Emptor.  While the buyer may think their getting a home at a great price, that actually remains to be seen if they don't do their homework and research other liens.  Good capsulization and welcome to ActiveRain.

Apr 26, 2012 11:34 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Need large amounts of VISINE to keep the eyes clear and open when going in to this subject...

Apr 27, 2012 12:33 AM
Sandy Acevedo
951-290-8588 - Chino Hills, CA
RE/MAX Masters, Inland Empire Homes for Sale

Hi Greg, congrats on the features, two in one day! You make it look easy!                

Apr 27, 2012 01:21 AM
Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

The question, "is it worth it?" I think is a very valid question because sometimes you can find just a good of price but not through a certain process like the auction setting.  Becoming educated and working with people who understand the process is the key.

Apr 27, 2012 02:13 AM
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

I have never seen a foreclosure auction and so I don't have an opinion, but your post was very informative.  Thanks for the post.

Apr 27, 2012 10:09 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Greg - This is important information.  I think many people don't understand what happens with a foreclosure auction.  Here, the buyers have to have all cash at the auction.

Apr 27, 2012 12:01 PM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Good information..Buyers have to evaluate the risks vs. the benefits.  It's complicated.

Apr 27, 2012 12:57 PM
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Greg:

Buying at an auction can be a risky proposition.  Foreclosure radar has a video of what happens at an auction on the court house step.  Very interesting.

Apr 27, 2012 02:22 PM
Greg Vander Wel
Realnet Tampa Bay - Tampa, FL

Thanks for your comments guys! Keep it coming..

 

Great!

Apr 30, 2012 05:49 PM